Taylor Devices(TAYD) - 2024 Q3 - Quarterly Report

Financial Performance - For the nine months ended February 29, 2024, net revenue increased by 10% to $32,518,000 compared to $29,480,000 for the same period in 2023[30]. - Net income for the nine months ended February 29, 2024, rose by 55% to $2,305,000, compared to $1,484,000 in the same period last year[30]. - For the three months ended February 29, 2024, net revenue increased by 24% to $12,254,000 compared to $9,891,000 in the same period last year[43]. Profitability - Gross profit for the nine months ended February 29, 2024, was $14,948,000, representing a 23% increase from $12,122,000 in the prior year, with a gross profit margin of 46%[30][31]. - The gross profit margin for the three months ended February 29, 2024, improved to 47%, up from 43% in the prior year[44]. Expenses - Research and development costs decreased by 64% to $321,000, down from $881,000, due to the completion of a major project[35]. - Selling, general and administrative expenses increased by 18% to $7,660,000, primarily due to higher employee compensation costs[36]. - Capital expenditures for the nine months ended February 29, 2024, were $755,000, a decrease from $2,383,000 in the same period of the prior year[56]. Sales and Orders - The company had 131 open sales orders in backlog valued at $30.2 million as of February 29, 2024, compared to 125 orders valued at $27.8 million a year earlier[33]. - Total sales within the U.S. increased by 21% year-over-year, while sales to Asia decreased by 53%[30]. - The company's backlog of sales orders decreased to $30.2 million from $32.5 million at the end of the prior year, with $16.1 million of the backlog on projects already in progress[67]. - The company expects to recognize revenue for the majority of its backlog during the 2024 and 2025 fiscal years[33]. Inventory and Receivables - Total inventory as of February 29, 2024, was $6,678,000, an increase of $737,000 (12%) compared to $5,941,000 at the prior year-end[60]. - Accounts receivable decreased by $667,000 (12%) to $4,887,000 as of February 29, 2024, while costs and estimated earnings in excess of billings increased by $410,000 (10%) to $4,534,000[62]. - The provision for potential inventory obsolescence increased to $369,000 for the nine months ended February 29, 2024, compared to $68,000 for the same period in the prior year[61]. Shareholder Actions - On January 4, 2024, the company entered into a Redemption Agreement to purchase 459,015 shares at $19.92 per share, representing approximately 13% of all issued shares[69]. Project Status - The number of projects in progress decreased from 12 to 7, while the aggregate percent complete increased from 33% to 43%[67]. - Accounts payable decreased by 44% to $956,000 as of February 29, 2024, compared to the prior year-end[68]. Stock Options - The estimated fair market value per stock option increased from $3.06 in February 2023 to $7.17 in February 2024, reflecting a significant rise in expected share price volatility from 30% to 36%[53]. - As of February 29, 2024, the total number of options outstanding and exercisable increased to 339,750 from 333,000 at May 31, 2023, with an average exercise price of $13.70[54].